Social Media is a fundamental transformation in the way(s) people find and use information and content, from hard news to light entertainment. It’s an evolution from broadcast delivery of content – content created by a few and distributed to many – to network delivery, where content can be created by anyone and published to everyone, in a context that is “many to many.” Said another way, publication and delivery by professionals to mass audiences has changed – now publication and delivery can be by anyone, professional or not, to niche audiences through networks of many channels. This is because the means of production are broadly accessible and inexpensive.
As a result of all this, attention and mindshare are fragmented, there’s emphasis on relationship, new forms of media are conversational, and transaction costs for communication approach zero.
I’m sure that needs work, but it’s a good start – I think a little better than the other definitions I found, including the definition-by-committee (including yours truly) that’s found on Wikipedia.
It’s arguable whether “social media” is the best label for the thing we’re talking about, but it’s the one that’s stuck for now.